howardhughes8

Keep in mind we are not comparing average customer margins against Amazon. Choosing to drop Amazon business is not materially impactful, and most likely a good decision. But decreasing general customer net margins most definitely is. We have seen what price dumping has done to the airlines, nothing but losses and BK. FINALLY, after decades, it seems they finally learned their lesson. It is ALL ABOUT RASM and unit profitability. Airlines are willing to cede market share if they will loose money. Airlines to cargo operators may not be the same, but one of the most important metrics is unit revenue per piece.

Fdxlag2

Read the first two paragraphs. They are offering 2 day air at the same price as ground to collect more customers. 2nd day air has always been highly discounted. The make money on the next day air. 2nd day has always been used to fill volume.

HoursHore

It’s funny how many pilots think that if they had stood in a different line on career day that they’d be running the company.

howardhughes8

No, but having a Master in Finance and knowing how to dissect financial statements does help.

howardhughes8

Again, the price difference between Ground and 2nd day air is huge!! Maybe I am writing in Chinese 🤔

Flyinhigh

The article I read said that this offer was made to "some" of FedEx' s customers. How many and who are they? How much was Amazon paying for shipping? If these select customers are offered 2nd day air at ground prices and the price is higher than the price Amazon was paying it sounds like a win to me. The whole key to this is "How much was Amazon being charged to ship on FedEx?" I sure don't know and I am pretty sure nobody on this forum (Master's degree or not) knows what they were paying.

Fdxlag2

The price difference between ground and discounted second day is not huge. You know rate Amazon got? You know who they are offering this rate to, yes that is correct, Amazon’s competition. You know we offer Walmart 2nd day at a huge discount right?

MEMA300

I’ve been hearing rumblings from a few non-pilot managers that have been on my JS.


https://www.apnews.com/eac24ef49f31bce50dbd6d6e3d9ee1aa

SaturnV

Most of this is way over my head so I won't even pretend to know whats going on here, but with my second grade reading level and from the couple articles I've read, it sounds like investors are no longer a fan of the Express product's cost (airline?) because when you have a slowing economy/trade feud its a bigger drain on profits versus ground? I bet Express (airline) is doing just fine for the company but that's just my opinion.

Anyways I thought this quote was interesting from Fred, I took it to mean he'll do whatever it takes to keep Wall Street happy including sacrificing parts of the airline AKA his "sacred cow"?

"FedEx warned of numerous looming challenges to its legacy Express business, including global trade uncertainty and adding more lighter e-commerce packages on its airplanes at lower margins. The company is offering steep discounts to some large shippers to try to get them to switch to its faster air shipping business. FedEx said it hasn’t changed its pricing strategy."

“As we go forward and things change, if we don’t see any kind of international growth, we will change our approach to the business,” Mr. Smith said. “We don’t have any sacred cows here.”

https://www.wsj.com/articles/fedex-p...es-11561497149

MEMA300

I’ve been saying that the passenger carriers have gone thru their 40 years in the wilderness and I think they have some good years ahead of them. Afraid that’s not the case here. With the recent uncertainty I honestly don’t understand why we are still bringing on new hires.